The confusing story of how Hewlett-Packard paid $11 billion for British software company Autonomy — only to later claim it was hoodwinked into grossly overvaluing the firm — just got more complicated.
The Financial Times on Monday said it reviewed “a trail of audit papers, accounting documents and internal emails” that suggest HP had reason to suspect Autonomy’s value was inflated months before HP bought Autonomy in 2011.
Many of the documents relate to Autonomy’s hardware sales, which HP has said were done to camouflage Autonomy’s tepid software sales before HP snapped up the company.
The Financial Times story implies that HP should have known about those hardware transactions in 2011, well before HP announced in 2012 that it had learned from a whistle-blower that Autonomy’s sales were artificially inflated. HP eventually wrote off $8.8 billion of the Autonomy purchase, claiming it had been misled by Autonomy’s former executives.
It’s not the first time HP has been accused of ignoring red flags about Autonomy’s worth. But in a statement Tuesday, HP said the documents reviewed by the Financial Times don’t prove HP did anything wrong.
“While HP eventually learned that a portion of Autonomy’s revenues were related to hardware sales, we knew nothing of the accounting improprieties, misrepresentations and disclosure failures related to such sales until after a senior Autonomy executive came forward and HP conducted an extensive investigation,” the statement said.
In a separate statement, Autonomy’s former CEO Mike Lynch insisted as he has previously that the company’s hardware and other sales were legitimate.
Photo by Kristina Sangsahachar, Daily News